BCSC dismisses allegations against Canaco management
TORONTO (miningweekly.com) – A British Columbia Securities Commission (BCSC) panel has dismissed allegations that Vancouver-based mining company Canaco Resources, a predecessor of TSX-V-listed East Africa Metals, breached securities laws concerning the disclosure of material changes.
The panel also dismissed allegations that the president and CEO and three other directors failed to act in the best interests of the company by voting to approve the issue of stock options before publicly disclosing assay results.
In a notice of hearing issued on April 24, 2012, BCSC staff alleged that Canaco president and CEO Andrew Lee Smith, Silver Wheaton CEO Randy Smallwood, a former Canaco director, as well as David Parsons and Brian Lock had breached securities laws by failing to disclose drill results immediately as a material change.
Staff also alleged that Smith, Smallwood, Parsons and Lock failed to act in the best interests of Canaco when issuing stock options with knowledge of the undisclosed drill results, and in so doing acted contrary to the public interest.
In its decision, the BCSC panel dismissed the allegations, stating that, "the evidence does not prove that the drill results would reasonably be expected to significantly affect the market price or value of the Canaco shares”.
As such, the panel found that the assay results were not a material change or a material fact relating to Canaco.
"This decision represents a complete vindication of our disclosure decisions. It is unfortunate that we have been subjected to a misguided, expensive, and wasteful regulatory process for the past 32 months," said Smith.
East Africa Metals' main asset, the Handeni property, is located in north-eastern Tanzania, and covers an area of about 97 km2. The Handeni property includes the Magambazi project, a gold deposit discovered in 2009.
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